The article is missing the key point: once you have a Country running a structural and cumulating trade surplus vs other Countries sharing the same currency (i.e. the rebalancing function performed by the exchange rate is disactivated), the fiscal union is not an option, it's a logical necessity. A Country can have a trade deficit if the Country in surplus lend the money to finance it. The debt position of PIIGS is balanced by a German credit. Therefore, or Germany asks for a fiscal and political Union in order to have the legal power to impose a long term change of laws that are making the PIIGS inefficient and funds the transition via tax collected also in Germany, otherwise Germany will go bankrupt together with its debtors.

Distress factors in EU periphery were not due to the debt level of countries (Portugal debt level was less then the european average, Spanish public debt was never a problem) but to the evident lack of solidarity between countries.

Comparison between euro member with similar situations (Spain and the UK) made it very clear that distress problems were due to the lack of the figure of lender of last resort. The problems with countries issuing debt in a foreign currency is well known to us.

The author also forgets issuing money is a funding decision by a country, and it should be used as an instrument. European Central Bank, and the Euro being stripped of that function made it an abomination.

Another iteration of the "German solution" to the European debt crisis: everyone will behave properly if we just give them more rules to follow. Dream on. Europeans always love the IDEA of the USA, until you ask them for a commitment to a common, inter-state fiscal and tax regime, as exists on the federal level, and the federal political bodies to legislate, adjudicate and administer it. At present Europe is stuck between a USA and a NAFTA-style union, and can't make up its mind which it wants.

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